Wheat 'fix' will hurt, Canadian farmer says

Terry Boehm raises spring wheat and other crops near Saskatoon, Saskatchewan, 1,600 kilometers (1,000 miles) from the nearest port. He says that complicates selling his high-quality wheat to foreign customers and increases the need for Canada's grain-grading system.

The system is "the key to our international competitiveness," particularly for wheat, says Boehm, chairman of his country's National Farmers Union's Trade Committee. "What we have now works for Canadian farmers."

The new U.S.-Mexico-Canada Agreement, which is expected to replace the existing North American Free Trade Agreement, or NAFTA, would revise the Canadian grain-grading system, of which U.S. wheat groups are critical.

Boehm talked with Agweek on Oct. 2, two days after the Trump administration announced the trade agreement.

The United States, Canada and Russia typically are the world's top wheat exporters, although their ranking varies from year to year. North Dakota is America's top producer of spring wheat.

The Canadian system "automatically designates U.S. wheat as the lowest grade simply because it is foreign. This means U.S. farmers producing the highest quality wheat arbitrarily get less value for their crop," say the National Association of Wheat Growers and U.S. Wheat Associates, which promotes U.S. wheat exports around the world.

The new agreement, though not yet in place, will "fix" that inequity, the U.S. groups say.

But Boehm says there are important differences in how Canadian and U.S. wheat farmers operate.

U.S. farmers generally focus on growing high-yielding wheat. In contrast, Canadian wheat farmers, who raise their crops far from ports, focus on high-quality wheat; foreign customers will pay extra for that wheat, which helps cover its higher transportation costs, Boehm says.

The existing system also ensures that foreign customers are getting the high-quality Canadian wheat they expect and for which they have paid, he says.

His answer to U.S. wheat advocates who say that U.S. wheat going to Canada also is of high quality: "Some is, some isn't." The issue is clouded because of large grain companies that operate in both countries, he says.

The Canadian grain industry is divided on the merits of the country's grain-grading system, according to published reports. Boehm, asked about that, says that the vast majority of Canadian farmers support it

But it's "very unlikely" that he and other Canadian supporters will be able to block or reverse the change, Boehm says.